BUSINESS INSURANCE

" I need to find an exit for my shares when I am not around." 

A well-constructed plan is essential to protect the value of the business and provide cash for the family in the event there is a major disruption in the business due to a co-owner’s death, disability, retirement or serious major illness or any other event that jeopardizes the continuity of the business.

Why do i need a Will?

Without a Will, your assets could be more burdensome than beneficial to your family at a time when they are most vulnerable. The distribution involved can be a long legal process especially if there is a dispute.
You should never assume that your assets would automatically go to the person you want to benefit. Given them security by making a Will and the law will protect your wishes.

Ask yourself :

• If a co-owner dies today, can you work with his family to run the business?
  
• Will the co-owner’s family members know how to run the business with you?
  
• Can they work well with you?
  
• Would your beneficiaries be able to get a fair price if they wanted to sell the shares?
  
• Do you have the funds to buy out the deceased co-owner’s shares/interests from the family members when there is no pre-agreed price in a written agreement?
  
• Can the shares/interests you are purchasing be transferred quickly to you?
  

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Problems without Business Protection Plan

Often these are:

• A new partnership is created due to the inheritance of the shares/interest by inexperienced heirs. Chances are this new partnership may fail.
  
• There is no pre-agreed price for any sale to take place when the heirs decide to sell to the other co-owners. As a result, it may take years to settle a transaction price.
  
• Some of the unqualified heirs may insist on being directors of the company and be active in running the business. This may lead to serious disruptions and disputes within management.
  
• It is possible that the co-owners may decide to abandon the business and start their own due to disputes with the heirs.
  
• Where inexperienced heirs get involved in the business, there tends to be loss of profits and uncertainty about the business future success.
  

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The Solution – BVPT: Business Value Protection Trust

Our BVPT ensures a smooth transition of the business to the other co-owner(s) and the value of your share of the business is protected against an event such as:

• Death
  
• Ill health
  
• Retirement
  
• Disappearance for an agreed period
  

Our BVPT consists of:

• A Buy-Sell or Cross Option Agreement: covering the terms of the sale and purchase including the agreed value or formula, events triggering a sale, funding and mode of payment.
  
• Power of Attorney: authorizing us, Rockwills Trustee, to transfer the shares/interests to the other co-owner(s) upon the occurrence of the agreed events that trigger a sale.
  
• Trust Deed by the co-owners: instructions to Rockwills Trustee regarding the periodical distribution of the sale proceeds to prevent these being misspent by the beneficiaries.
  
• Life insurance policy: as the main funding mechanism to purchase the shares/interest of the outgoing co-owner.
  

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Advantages of BVPT

• Guarantees the sale of shares/interest at a full and fair value that was agreed by co-owners.
  
• Prevents inexperienced and unqualified heirs from being involved in the business or the selling of the deceased’s shares to outsiders.
  
• Smooth transfer of ownership to the co-owners is ensured by the Trustee.
  
• By using life insurance, the purchase of the shares/interest becomes very affordable, minimizing the need to borrow or strain family finances for the purchase. More importantly, it ensures that the other co-owner(s) have the necessary funds to pay for the shares/interest.
  
• Rockwills Trustee acts as the Trustee for BVPT protecting the interests of your beneficiaries and that of the co-owners.
  
• Shares/interests are easily converted to cash.